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HAVAIC acted with integrity with us, say founders from VC’s portfolio companies

While SA venture capitalists have expressed shock over venture capital (VC) company HAVAIC‘s decision to sue startup Custostech for $4.45-million, the founders of four of the VC’s investee firms say there was nothing untoward in their dealings with the VC.

The VC alleges that the startup reneged on a R3.5-million investment agreement. This, while the startup revealed to Ventureburn last week that it had been forced to lay off most of its staff (see this story and this one).

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The founders of five investee firms say HAVAIC has always acted with integrity and honesty in dealings with them

However, speaking to Ventureburn, the founders of four of the VC’s 12 portfolio companies, claim that the VC has acted in good faith and integrity after investing in their companies. A fifth was more cautious in their comment.

“In my experience in dealing with HAVAIC they have always kept their word, and always argued for founder and team interests,” said Recomed founder Sheraan Amod. According to Amod, the VC invested about R2.5-million in a R4.5-million round in the healthtech in 2017 (see this story).

Another founder, Warren Myers of startup Aura, echoed this.

The startup — which has developed a cloud-based security and safety platform that is used by Uber among others –has netted R12-million in all from HAVAIC, with the most recent investment being made last year (see this story).

Myers said the VC’s support, which has included financial, advisory, and strategic support “has always been welcomed” since the first time the Myers and his team met them. “On top of this, HAVAIC have always acted with fairness and ethicacy,” he added.

“Our relationship with HAVAIC started when Aura was a startup. Together we have taken Aura from being a startup to being a true scale-up, not only commercialising at a national level, but entering international markets as well,” he said.

Another founder, who wished not to be named, added that the VC had been “truly amazing”.

“We would definitely go back to them,” added the founder.  “There was no shadyness whatsoever, they were to the book”.

A fourth founder, who also asked not to be named, said the VC wasn’t difficult to work with and was not “evil or bad”.

They may have made some poor calls, said the founder, and had also played hard ball when kicking off investment negotiations.

“In the very beginning they came to me with very harsh stupid terms, but they came to their senses,” he added.

But a fifth founder, who also asked not to be named because it was a “sensitive” time for the startup, however was more cautious.

The founder said he wouldn’t recommend the VC to anyone “unless you are a highly experienced business person who is able to understand and negotiate terms as well as run a business independently and keep them out of executive decision making”.

Read more: SA venture capitalists shocked over Havaic’s bid to sue Custostech for $4.5m
Read more: SA’s Custostech lays off staff after VC sues startup for $4.5m over failed investment bid

*Correction: The initial version of this article had it that HAVAIC invested R4.5-million in Recomed in 2017, when in fact it led a R4.5-million round, with the VC itself contributing R2.5-million of this total. 

Featured image: Custos Media Technologies via Facebook

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